01 Aug 2022
This month, we provide a Q and A on unfair, constructive and wrongful dismissal and outline the circumstances in which claims can be pursued.
Whether or not a dismissal is unfair or wrongful will depend on the circumstances of each particular case. Generally, schools and Councils follow detailed dismissal procedures according to the reason for possible dismissal. It is important to understand your basic rights and seek support at any meetings arranged, even if only for someone to act as a witness for you.
What is unfair dismissal
Unfair dismissal is a statutory right available to employees who believe they have been dismissed unfairly or unreasonably by their employer. Employees must have completed two years’ service before they are able to bring an unfair dismissal claim. There are, however, some dismissals which are deemed to be “automatically unfair” e.g. on whistleblowing grounds. These cases have no qualifying period.
Dismissal for discriminatory reasons will also give rise to a claim, without the need to have accrued 2 years’ service.
When is a dismissal fair?
The law says that it is fair for employers to dismiss an employee for one of the following five reasons:
• Misconduct at work
• Lack of capability (or qualifications) to do the job (including sickness)
• Redundancy
• Illegality
• Some other substantial reason
However, even if the employer convinces a Tribunal that they dismissed their employee for one of those reasons, they still have to show that they followed a fair and reasonable procedure. The procedure to be followed depends on the reason for dismissal.
Much of the procedure to be followed in any particular case will be set out in the employer’s policies and procedures. This must generally be followed to ensure a dismissal is fair. However, the fairness also depends on other factors, as set out in case law and the Employment Rights Act 1996.
Should I pursue an appeal if dismissed?
Yes, an appeal must be pursued in every case where the employee is dismissed. Otherwise, compensation in the event of a successful claim can be reduced. However, the appeal process won’t have any bearing on the time limits that apply.
When do I need to bring a claim for unfair dismissal?
The time limit for lodging a claim for unfair dismissal is three months, less one day, from the effective date of termination of the contract of employment. This time limit is strictly applied. Prior to pursuing a claim, a process of ACAS Early Conciliation must be followed, during which the parties can discuss if the matter can be resolved and the time limits are extended.
What remedies are available?
If a Tribunal finds in favour of the employee it can order:
• Reinstatement – a return to the original job with no loss of money or security
• Re-engagement – getting another job with the same employer
• Compensation – a basic award calculated in a similar way to a redundancy payment plus
a compensatory award to compensate the employee for the financial losses incurred as a result of the dismissal.
If an employee has been unfairly dismissed, they will usually be entitled to a basic award depending on their weekly pay, capped at a statutory amount per week for each year of employment and adjusted for age (no Basic Award is payable where a statutory redundancy payment has been paid) and a compensatory award based on their losses up to a statutory maximum but limited also to a year’s pay.
Unless the employee is a very high earner, it is rare for Tribunals to award the maximum amount. Most will award compensation for loss of earnings to the date of the hearing plus a limited amount to compensate for future loss. A Tribunal will set the compensatory award with a view to covering the time during which someone is unemployed. This will take into account the efforts they have made to find another job. An unfair dismissal can, however, result in a reduced or nil compensatory award if it is found unfair for procedural reasons alone and the Tribunal thinks a fair procedure would have made no real difference. It is also important to note that the Tribunal will consider whether the Claimant has made genuine attempts to mitigate their loss by, for example, applying for alternative work or seeking benefits.
Reinstatement and re-engagement are rarely ordered by Tribunals.
Tribunals can adjust awards up or down by up to 25% if they think that either the employer or
employee unreasonably failed to follow the Acas Code of Practice (www.acas.org.uk).
Employees might lose out, too, if they were partly to blame for their dismissal.
What is constructive dismissal?
Constructive dismissal claims can be pursued when an employee resigns in response to a significant and fundamental breach of their contract of employment by their employer. The breach can be a breach of the express terms of the contract or an implied term e.g. mutual trust and confidence. Resignation must be in direct response to the breach. There are numerous hurdles to overcome.
These cases are hard to win. Not every breach of contract will entitle an employee to resign and claim constructive dismissal and advice should be sought before making a decision to resign in response to an alleged breach of the employment contract. Each case will turn on its own facts.
Claims for constructive dismissal must be lodged in the Tribunal within three months less one day of the last day of employment.
What is wrongful dismissal?
Unlike unfair dismissal, which is a statutory right, wrongful dismissal is a contractual right.
Typically, an employer wrongfully dismisses by failing to give the correct notice. In those circumstances compensation is usually loss of earnings for the notice period.
The minimum statutory periods of notice required from an employer are:
• 1 month to 2 years of employment = 1 week’s notice
• 2 years to 12 years of employment = 1 week for each year worked
• 12 years plus of employment = 12 weeks’ notice
Failure to pay statutory notice may give rise to a claim for unlawful deduction from wages, as well as breach of contract. Unless an employee is guilty of gross misconduct, an employer must either allow them to work out their notice, or make a payment to cover that notice period. The notice period is whatever the contract says, subject to the statutory minimum. Even if an employee has been wrongfully dismissed, they are under a duty to do their best to find alternative employment (to ‘mitigate’ their loss). In assessing what their losses are, they have to offset any earnings they receive during that period and any earnings they ought to have received, assuming they had made reasonable attempts to find alternative employment.